When the market comes off, everyone looks for reasons why. Interestingly, no one seems to ask when the market is going up. I have views on this too but will save for another day...perhaps tomorrow. For today, there is something more important and interesting to write about.
Deutsche Bank (DBK) has fallen to fresh new all-time lows at E10.65/share. That's right, it took out the low from the credit crisis in early 2009. Wonder what happens when it hits single digits?
And to double-check on the weakness of DBK stock, we also track DBK Credit Default Swaps (CDS). I have written on CDS before but know that as the spread moves up/wider, it is a sign of weakness. Again, CDS is a credit derivative instrument that is traded by Institutions and used as a form of a "hedge" on the credit worthiness of the issuer, DBK in this case. Note how DBK CDS is moving wider but has yet to take out the high's from earlier this year. Worth keeping an eye on, for sure:
Why is DBK getting monkey-hammered the past few sessions?
Who knows? I don't exactly spend my days doing fundamental research on large global banks (I do spend my time doing fundamental research on much smaller Canadian companies where I feel we have a competitive advantage). What we do know is that this is a big bank and like all big banks it is bigger today than it was in the years leading up to the credit crisis. What's in there, I have no idea but I bet their is plenty of toxic assets: